Miliband: Debt will fall every year

Ed Milband is pledging to cut the deficit in Britain’s public finances every year until they are back in the black as he stakes Labour’s claim for a return to power just five years after losing office in the aftermath of the financial crash.

Launching the party’s General Election manifesto today in Manchester, he will say that Labour in government would be “the party of responsibility” while holding out hope in the form of a fairer, more equal country that “works for working people”.

The first page of the manifesto document will commit a new Labour government to a “budget responsibility lock”, guaranteeing that every policy is fully costed and will not require any additional borrowing.

However – unlike the Conservatives and Liberal Democrats who launch their manifestos later this week – it offers no timetable for clearing the deficit, saying only that it will get national debt falling and a surplus on the current budget “as soon as possible in the next parliament”.

The Lib Dems challenged Labour to “name the day” when they would finally balance the books while the Conservatives said the independent Institute for Fiscal Studies had already made clear a Labour government would run a deficit throughout the whole parliament.

The emphasis on financial responsibility, in what aides are describing as plan for “big reform, not big spending”, will be seen as a clear acknowledgement by the party that it needs to rebuild trust with voters on the economy after the crash of 2008.

The opening page states: “The first line of Labour’s first Budget will be: This Budget cuts the deficit every year.”

In his speech, Mr Miliband – who famously “forgot” to mention the deficit in his party conference address last year – will seek to couple the need for financial discipline with a commitment to ensure prosperity is fairly shared and the National Health Service is properly protected.

He will contrast Labour’s approach with the Conservatives, who he will accuse of making spending promises that are “unfunded, unfair and unbelievable” which would only lead to higher taxes while undermining public services.

“The plan we lay before you is no less ambitious because we live in a time of scarcity. It is more ambitious because it starts from a clear commitment to balance the books and more ambitious because it does not stop there,” he will say.

“It meets the scale of the challenges we face today with not one policy funded by extra borrowing. It is a better plan for a better future which shows the next government will be disciplined precisely because we want to make the difference.

“It is a plan to change our country. A plan to reward hard work, ensure prosperity is fairly shared, build a future for the next generation and improve our NHS. This is a manifesto which shows Labour is not only the party of change but the party of responsibility too.”

The manifesto will acknowledge the need for “tough choices”, with departmental budgets outside protected areas like health and education facing cuts year-on-year until the deficit has been eliminated.

Where it does contain new spending commitments officials said it would explain how they would be paid for – such as a £2.5 billion boost for the NHS funded through a combination of a “mansion tax”, a levy on tobacco firms and closing a hedge fund tax avoidance loophole.

Smaller class sizes for infants will be covered by ending the free schools programme while a commitment to 25 hours of childcare for the working parents of three and four year-olds will be met by an increase in the banking levy.

The manifesto will reaffirm key policy commitments including a freeze on gas and electricity bills to 2017, banning “exploitative” zero hours contracts, raising the minimum wage to £8-an-hour, putting the top rate of tax back up to 50p, and abolishing the non-dom tax status.

“Britain will only succeed when we reward everyone’s hard work in our country, not just those on the six figure bonuses,” Mr Miliband will say.

The Conservatives warned that Labour had no plan to clear the deficit and balance the books. David Cameron, campaigning in the North East, will say Labour would return the country to the “dark days of debt and waste”.

“A win for Labour, with their addiction to taxes, borrowing and spending, would cast a shadow over the region once more,” he will say.

Lib Dem leader Nick Clegg said that Labour’s failure to set out a timetable for clearing the deficit meant they were “not coming clean” with voters about what their plans meant.

“Ed Miliband and Ed Balls are intent on playing Russian roulette with Britain’s economy. The fact is, Labour want a return to reckless and excessive borrowing,” he said.